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IMF chief thanks India for support to Sri Lanka as island nation seeks bail-out

Finance Minister Nirmala Sitharaman with IMF Managing Director Kristalina Georgieva (Photo: PIB)

International Monetary Fund (IMF) Managing Director, Kristalina Georgieva, appreciated India's role in supporting Sri Lanka through its economic and humanitarian crises. She shared her views with Finance Minister Nirmala Sitharaman who is in Washington to attend the International Monetary Fund and World Bank meetings.

A statement by the Indian government said: "Sitharaman indicated that the IMF should support and urgently provide financial assistance to Sri Lanka. The Managing Director assured the Finance Minister that the IMF would continue to actively engage with Sri Lanka".

The two also discussed recent geopolitical developments, and their impact on the global economy in relation to rising energy prices. The Finance Minister told the IMF that India is entering into new economic activities which will help resolve global supply chain issues.

Sitharaman is in the US at the same time as a Sri Lankan delegation which is seeking an urgent bail out for the crisis-ridden island nation. Led by Sri Lankan Finance Minister Ali Sabry, the delegation has formally urged the IMF to release funds urgently. Sri Lankan media reports that the delegation is likely to ask the IMF for a $4 billion loan.

The Indian Ocean nation faces its worst economic crisis since independence with people protesting everyday in capital Colombo for almost a month. The hard-stricken people have taken over the iconic Galle Face sea front which also leads to the administrative offices.

The nation has been facing food and fuel shortages, sky-rocketing prices, non-availability of essential medicines, and daily power cuts. Unable to cope with hardships, many families from the north-west have fled to India in boats.

The protesting people are calling for President Rajapaksa Gotabaya to quit. The mood in the island has turned antagonistic against the all-pervading Rajapaksa family which held a large number of portfolios in the government. The public perception is that the family brought ruin upon the country because of poor governance and proximity to China.

A bankrupt Sri Lanka has asked its diaspora to send foreign exchange so that it can re-start imports of essential goods. The country had also asked China to  lend it loans but the communist government has not responded. 

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